Effects of migration with endogenous labor supply and heterogeneous skills

Gianfranco Atzeni, Deidda Lg (), Marco Delogu and Dimitri Paolini

Working Paper CRENoS from Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia

Abstract: We analyze the effects of migration allowing for endogenous labor supply in a standard two-region model with monopolistically competitive producers and love for variety. We find that the welfare effects of migration depend on firms' market power in the final good markets. If market power is sufficiently high, migration of low-skill individuals positively affects the welfare of native high skill individuals in the destination region, while low skill individuals are unaffected. Natives of the origin region are always better off, irrespective of their skills. Differently, if market power is sufficiently low, low skill migration makes both high and low individuals native of the destination region better off.

Keywords: Welfare Analysis; Monopolistic Competition; migration; Labor Supply (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-com, nep-int, nep-mig and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:cns:cnscwp:202111

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